Beverages take vending to the digital age

Jim Slater of Costa, left, Paul Newcombe of Intel Corp. and Eric Achtmann of Costa exhibit the multi-sensory experience single-serve hot beverage machine at the National Retail Federation show in January.

Photo credit: Photo courtesty of Paul Schlossberg

Our industry’s history is based on only one of the five senses — the sense of sight. We are displaying (the retail word is ‘merchandising’) products for sale in vending machines. Visual merchandising is the primary way we appeal to potential shoppers as they approach and engage a vending machine.

That one-dimensional world ended when the Costa Express CEM-200 was introduced at the Intel booth at the 2013 National Retail Federation (NRF) BIG Show. This is a multi-sensory, intelligent vending machine appealing to all five senses.

Sight: The Costa Express CEM-200 is attractive and eye-catching from a distance and even better up close. There is a 27 -inch interactive touchscreen. Members of the user interface team have worked on Xbox, PlayStation and the digital presence of Harry Potter, among others. The icons are easy to see and understand, leading to the next sense.

Touch: Interacting with the CEM-200 is quite simple, making it easy for you to select a customized beverage. The sight and touch capabilities represent the application of gamification principles to non-game usage — in this case the sale of hot and cold beverages.

Sound: You can hear the sounds of a coffee shop when you order and while you wait for your beverage to be prepared and delivered. The sound system designer mixes for famous bands like U2, Coldplay, Katy Perry and Oasis.

Scent: Imagine that — the sense of smell is teased using a proprietary dispensing system. This is a primal experience. Smell, triggering the memory of aromas we like, is a powerful spark in creating favorable experiences — in this case shopping for a cup of coffee at a vending machine. The natural scent system was developed together with leading perfumers in Paris.

Taste: Last, and by no means least, is the absolute necessity to deliver a good tasting product. My cappuccino was delicious. Judging by the crowds at the Intel booth during the two days I was at the NRF, the Costa Express was always busy serving good tasting beverages. Their objective is to serve the same great tasting drinks at their cafes and from the CEM-200.

Costa required multiple partnerships

This is a 21st century vending intelligent machine designed by an international consortium from six countries directed by Costa. Pininfarina (designers of Ferrari and Maserati cars) provided the exterior design. The internal design is inspired by aerospace technology. As part of its Intelligent Systems Group, Intel provided the “brain and heart” including operating systems, the Intel AIM Suite for anonymous audience impression metrics, telemetry and more. Intel’s Intelligent Systems Group works with retailers such as Costa Coffee to bring innovative technology into the shopping experience to create more relevance and entertainment for consumers.

Costa Coffee has made the CEM-200 easy for both the shopper and the operator. The dispensing process cannot function unless there is a cup in the well.

For the shopper: All products are fresh and natural — made to the same standard as the Costa cafes. There are 250 selection options available — both hot and cold drinks. The bean-to-cup brewing process delivers freshly-made coffee. You can add sugar or sweetener by selecting from the icon menu. Or you can simply take the condiments you prefer from convenient slots adjacent to the coffee service well. Payment flexibility is offered but only on a cashless basis — chip and PIN number, wave and pay, NFC, mobile phone. Here is a 21st century vending machine — and the future is clear — no coins, no bills — only cashless payments accepted.

For the operator: The machine is self-cleaning. The process is activated once daily by the operator. The stocking and daily operations are managed by the onsite operating partner. Scheduled maintenance is performed by qualified technicians on regular intervals (e.g., every six months). Using an advanced telemetry system with the Intel AIM Suite gives the operator powerful anonymous marketing capabilities.

There is an optical sensor, enabled with AVA (anonymous viewer analytics). We can learn about the demographics of those approaching the machine while respecting individual privacy. Learn more about what is happening at the machine — observe engagement (seeing and looking at the machine), dwell time (how long he/she was interacting) and whether or not a purchase was made. Telemetry allows for remote monitoring and alerts if service/support is required.

Costa Express deployments will be based on a shared-revenue business model. This establishes a mutual interest in having successful locations. The CEM-200 is something every operator should investigate. It delivers a wide range of hot beverages without the need for skilled baristas. This is an opportunity for operators in vending, OCS and onsite foodservice.

Pepsi and Coke attend NRF

Also in the Intel booth was the latest generation of the Pepsi Interactive Vending Machine. You can purchase Pepsi beverages using the interactive screen. You can also send or redeem a gift — a 20-ounce beverage — using an email with an authorization code. You can watch video — Pepsi ads. This intelligent vending machine has power ports to attach a USB cable to charge your phone. There are games to be played with a free 20-ounce beverage as the prize. Pepsi is testing the machine at General Growth Properties’ shopping malls. “The pilot launch of our Interactive Vending equipment is an exciting step in transforming the point-of-purchase experience,” said Margery Schelling, global innovation officer, PepsiCo Foodservice. “We’re thrilled to partner with GGP, a company that also values innovation, to bring its shoppers this unique opportunity to engage with our brands. We know consumers will enjoy the new machine and want to return again and again.”

Coca-Cola was at the NRF Show but not exhibiting on the show floor. They hosted the NRF Members Coca-Cola Happiness Lounge — describing it as an opportunity to refresh, relax and recharge. It was interesting to find a consumer brand, Coca-Cola, at the NRF. You’ll find lots of consumer product brands on exhibit floor — in various booths. These brands are cited and featured as success stories from the use of the systems, devices and products provided by exhibitors. One of the Coca-Cola hosts told me — “The NRF members are our customers. We should be here.”

Product samples were served including their iconic brands and new products. The Coca-Cola Freestyle® was available offering more than 100 brand choices. My usual inquiry about Freestyle® is: “When will it ‘grow up’ to be a vending machine with payment modes?” The response was: “…in Japan, where cashless is prevalent, there are Freestyle® vending machines in test.”

Coca-Cola was showing a small glass front cooler with a merchandising screen. Video is presented with product shots and other images without obscuring the view of the products inside. The display panel is applied to the outside of the door. According to Cris Derr, product marketing director — Touch, at Planarm, a digital signage and visual display provider, “Transparent LCDs, such as Planar’s LookThru LCDs, enable eye grabbing digital signage for retail fixtures and coolers, such as the Coca-Cola cooler seen at NRF. Planar’s proprietary application of LookThru LCDs creates a much more cost and energy effective solution as they don’t require a replacement of the existing door and they put less strain on the cooler’s compressor.” The display panel can be applied to a full-size cooler —the type seen at convenience stores or other venues. The future for these merchandising panels includes interactive control of vending machines.

Paul Schlossberg is the president of D/FW Consulting, which helps clients merchandise and market products in impulse intense selling environments, such as vending, foodservice and convenience stores. He can be reached at Paul@DFWConsulting.net or 972-877-2972; www.DFWConsulting.net.